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Industrial output in China’s export powerhouse Zhejiang Province picked up momentum at the start of the year, offering fresh signs of manufacturing resilience even as weak pricing power continues to weigh on producers.
Value-added industrial output — a key gauge of factory activity measuring production after deducting intermediate inputs — rose 9.8% year-on-year in January and February, according to data released March 19 by the Zhejiang Provincial Bureau of Statistics.
The pace was 2.9 percentage points faster than the province’s full-year growth rate in 2025.
The expansion was broad-based, with output increasing across 32 of 37 major industrial sectors.
Higher-value manufacturing drove the expansion, led by a 24% jump in computers and electronic communications equipment. Automotive and general machinery output surged 16.7% and 11.8%, while electrical equipment and utilities grew 10.6% and 9.4%, respectively.
Together, these sectors accounted for nearly six percentage points of overall industrial growth, highlighting continued strength in technology-heavy and equipment manufacturing.
Main engine of expansion
Private companies remained the main engine of expansion. Output from large private industrial firms — those with annual main-business revenue of 20 million yuan ($2.9 million) and above — climbed 10.6%, contributing 7.4 percentage points to overall industrial output growth.
Zhejiang’s economy is heavily driven by privately owned manufacturers, making the province a bellwether for broader trends in China’s entrepreneurial industrial sector.
Yet pricing data point to a more complicated recovery. China tracks factory inflation through the Producer Price Index, or PPI, which measures prices manufacturers receive for goods at the factory gate and serves as an indicator of corporate pricing power and industrial demand.
Zhejiang’s industrial producer prices fell 1.5% year-on-year in the first two months, while input purchase prices declined 1.4%, reflecting continued deflationary pressure across supply chains.
The declines narrowed slightly in February, however, with both measures gaining 0.2 percentage point on a month-to-month basis — a tentative sign that price conditions may be stabilizing after a prolonged period of weak industrial demand nationwide.
The mixed picture — rising output alongside falling prices — mirrors broader trends in China’s manufacturing sector, where production has been supported by exports and upgrading industries even as companies face thin margins and cautious downstream demand.
